Javier Milei, the Argentine President, faces legal investigation after he promoted a Solana-based crypto meme coin called $LIBRA which collapsed after a surge. He tweeted about the token as a private project that is dedicated to encouraging the growth of the Argentine economy. Following the post, $LIBRA went to an all-time high of $1 per coin and then suddenly drained into $0.1321 within hours.
Milei deleted the post and denied any connections with the project stating that he was unaware of the details. The President’s Office later announced through the official X account that they had decided to conduct an urgent investigation. Following the accusations of pump and dump and other suspicious activities, the website of Libra has been flagged by the MetaMask.
The event has become international news, affecting both crypto and stock. Argentina’s stock market closed with a 5% downtrend and Solana blockchain witnessed a 16% dip. Hayden Mark Davis, a crypto entrepreneur, and Julian Peh, the CEO of the AI blockchain project KIP Protocol, were also the frontrunners promoting the Libra project.
What is Libra? Who’s Behind the Project?
The Viva La Libertad project, known by its ticker $LIBRA, positioned itself as the trailblazer of the Argentine blockchain economy. Its motto was to fund local businesses and small-scale projects and support those who contribute to Argentina’s development.
As an investment firm, its website allows individuals and startups to apply for grants by filling out a Google form. According to its website, it is a private initiative project developed by KIP Network INC. KIP’s co-found, along with the blockchain entrepreneur Julian Peh worked as the core members of the protocol.
What Really Happened to LIBRA?
After the creation of the Viva La Libertad project website, the development team did not offer extensive promotion for it. Half an hour before Milei’s tweet, they deployed the $LIBRA token on the Solana blockchain. After the tweet, the token witnessed huge buying pressure. Then, suddenly, it collapsed. On-chain data shows that only 57 wallets among the 15K wallets executed profitable trades.
TRM Forensics, a platform dedicated to finding the source and destination of blockchain transactions, has revealed what happened in the case of LIBRA. An address received around 1 million tokens just 20 minutes before the tweet by the President. The account then added the tokens to Meteora DEX’s liquidity pools and waited for the President’s tweet to arrive.
After the tweet, wallets probably associated with Libra’s core team started withdrawing the token from the liquidity pools. According to Observatorio del Derecho a la Ciudad, a nongovernmental organization in Argentina, around 4 billion dollars were looted from 40,000 people.
The Real Connection Between President Milei and Libra
The opposition parties accused Milei has serious involvement in the scam, and demanded impeachment proceedings. Various web3 experts opine that President Milei accidentally slipped into this controversy due to his lack of knowledge of blockchain technology, especially the meme coin niche. He must have followed the $TRUMP and $MELANIA social media buzz. Meanwhile, web3 investigators found that the wallet activity of LIBRA is similar to MELANIA, where a wallet is found to be owned by the creators of both tokens. However, the concluding evidence is yet to arrive.
How Libra’s Crash Affected Solana & the Memecoin Niche?
Beyond its effects on the Argentine political milieu and the stock market, LIBRA’s rug pull hit Solana’s market cap with a storm. It bled with a 16 downtrend, dropping the liquidity volume from 12.1 billion dollars to 8.29 billion. However, $SOL survived the storm by rebounding quickly.
Final Thoughts: Who is to Blame?
Several online news media and Milei supporters accused Hayden Mark Davis as the perpetrator of the scam. However, he denied the pump and dump and said that the token would have become successful if Milei hadn’t ditched the project in his later tweet. He expected it to rebound, but the tweet ruined it all.
Libra entered the cryptocurrency scene with the claim that it could transform the Argentine economy to new heights like the U.S. through the adoption of blockchain technology. According to the Viva La Libertad project, tokenomics divided the allocation into three: 50% to Argentina’s growth, 30% to liquidity, and 20% to the treasury. However, it has been found that around 80% of the tokens were sold by the wallets of the development team. This contradicts the decentralized vision of the blockchain realm.
